CRT Announces Year End Result

CRT Announces Year End Result

Another Strong Growth Year

South Island farmer owned co-operative CRT achieved total revenues of $478 million for the year ended 31 March 2007, a new record, and a $47 million increase on 2006.

Announcing the result CRT Chairman Don McFarlane said that in line with its co-operative principles the CRT board had resolved to distribute $3 million of the pre-tax profit of $3.6 million to shareholders by way of a bonus rebate.

Another record was the level of rebates provided to shareholders during the year, an increase of $1.8 million to $13.6 million.

Mr McFarlane said the board was very satisfied with the result particularly against the tighter rural market backdrop and given the very extensive development CRT had completed during the year. CRT had responded quickly to consolidation in the market and had pursued its mission of ensuring strong competition in the rural supplies market was maintained to benefit shareholder farmers. These changes in the market reaffirmed the importance of the role of the co-operative, making it as relevant today as it was when established by groups of farmers in the early 1960’s. CRT aims to set the benchmark for both pricing and service, and to be successful in this role it must also set the benchmarks in terms of operational efficiency.

The co-operative had opened 7 new FarmCentre stores in the South Island in the last 14 months, including three new purpose built stores. The last two of these were officially opened in Tapanui and Fairlie this month. Other locations where new stores were opened were Culverden, Ranfurly, Kurow, Otautau and Amberley. Mr McFarlane said that the scale of CRT was an important factor in achieving this development and he also paid tribute to the staff of CRT for the year’s results.

Farmer support of the new stores had been strong and this had contributed to more than 1,000 new farmers joining CRT during the year, with the co-operative now having in excess of 21,000 shareholders.

Mr McFarlane said that the $3 million bonus rebate would be distributed in August using a formula recognising shareholders purchases through CRT. The rebate would comprise $1.8 million in cash and $1.2 million in share capital. One of the major contributions to the bonus would be on CRT FarmCentre and CRT Seed purchases which would each make a 1.9% bonus rebate. Other areas contributing to the bonus rebate would be FarmDirect fuel purchases at 3.7% and the CRT Card at 0.1%.

Chief Executive Brent Esler said all areas of CRT’s business had achieved good growth in the year. Business development had been a key focus for the year, with new stores, staff and brand development being the key components.

Growth in the retail and seed business in particular had been assisted by new stores, new shareholders, the development of the CRT team and brand, and the successful integration of the Cuddon and Stewart business in North Canterbury. CRT had further strengthened its position in the dairy sector through these developments. CRT now operates 29 FarmCentre stores spread from Motueka to Invercargill.

CRT Real Estate had benefited from the acquisition of Landward Realty in Otago and a number of high profile individual agents in other regions. It had built strongly on the success of the previous year in both profile and performance and was a strong contributor to CRT, in profits and synergies.

The CRT Card and the 2300 supplier companies affiliated with it enjoyed strong growth, as has the CRT Feed business. A new feed manufacturing facility is planned at Rolleston to service this growth with increased capacity and centralised production for the CRT owned Reliance and McMillan stock food brands.

CRT’s fuel subsidiary FarmDirect had undergone significant change during the year with closer integration of the management, call centre and sales team into CRT.

As well as the new Rolleston development, CRT has commenced construction of replacement buildings for stores it has outgrown in Winton and Leeston and Mr Esler said these would open later this year.

ENDS

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